- -----------------------------------------------------------------
- -----------------------------------------------------------------
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1998
Commission File Number 1-8351
CHEMED CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 31-0791746
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
2600 Chemed Center, 255 E. Fifth Street, Cincinnati, Ohio 45202
(Address of principal executive offices) (Zip code)
(513) 762-6900
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Amount Date
Capital Stock 00,000,000 Shares July 31, 1998
$1 Par Value
- -----------------------------------------------------------------
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Page 1 of 17<PAGE>
CHEMED CORPORATION AND
SUBSIDIARY COMPANIES
Index
Page No.
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheet -
June 30, 1998 and
December 31, 1997 3
Consolidated Statement of Income -
Three months and six months ended
June 30, 1998 and 1997 4
Consolidated Statement of Cash Flows
Six months ended
June 30, 1998 and 1997 5
Notes to Unaudited Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7 - 12
PART II. OTHER INFORMATION 13 - 15
Page 2 of 17<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(in thousands except share and per share data)
UNAUDITED
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
-------- ----------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 54,027 $ 70,958
Accounts receivable, less allowances of $2,815
(1997 - $2,626) 44,308 42,142
Inventories 9,153 8,743
Statutory deposits 16,419 16,137
Current portion of redeemable preferred stock 27,207 27,136
Other current assets 13,542 12,352
---------- ----------
Total current assets 164,656 177,468
Other investments 34,655 40,124
Properties and equipment, at cost less accumulated depreciation
of $40,903 (1997 - $36,179) 56,520 53,089
Identifiable intangible assets less accumulated amortization
of $4,772 (1997 - $4,194) 13,402 13,645
Goodwill less accumulated amortization of $19,721
(1997 - $17,677) 149,551 143,003
Other assets 16,898 21,509
---------- ----------
Total Assets $ 435,682 $ 448,838
========== ==========
LIABILITIES
Current liabilities
Accounts payable $ 8,843 $ 8,774
Current portion of long-term debt 5,154 5,313
Income taxes 13,272 12,460
Deferred contract revenue 27,346 25,489
Other current liabilities 35,953 42,329
---------- ----------
Total current liabilities 90,568 94,365
Long-term debt 82,093 83,720
Other liabilities and deferred income 41,491 42,633
---------- ----------
Total Liabilities 214,152 220,718
---------- ----------
STOCKHOLDERS' EQUITY
Capital stock-authorized 15,000,000 shares $1 par;
issued 13,138,360 (1997 - 13,019,722) shares 13,138 13,020
Paid-in capital 161,439 158,485
Retained earnings 149,863 148,680
Treasury stock - 3,179,996 (1997 - 2,942,205) shares, at cost (96,989) (88,063)
Unearned compensation - ESOPs (22,532) (23,959)
Accumulated other comprehensive income 16,611 19,957
---------- ----------
Total Stockholders' Equity 221,530 228,120
---------- ----------
Total Liabilities and Stockholders' Equity $ 435,682 $ 448,838
========== ==========
</TABLE>
See accompanying notes to unaudited financial statements.
Page 3 of 17<PAGE>
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
UNAUDITED
(in thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ---------------------
1998 1997 1998 1997
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Continuing Operations
Service revenues and sales $ 94,943 $ 86,019 $183,355 $163,676
-------- -------- -------- --------
Cost of services provided and
cost of goods sold 58,361 54,284 114,237 102,307
Selling and marketing expenses 8,316 6,095 15,443 12,130
General and administrative expenses 20,340 19,593 39,400 36,289
Depreciation 2,680 1,430 5,284 4,116
--------- --------- --------- ---------
Total costs and expenses 89,697 81,402 174,364 154,842
--------- --------- --------- ---------
Income from operations 5,246 4,617 8,991 8,834
Interest expense (1,841) (2,915) (3,599) (5,552)
Other income, net 5,612 4,482 13,945 14,874
--------- --------- --------- ---------
Income before income taxes 9,017 6,184 19,337 18,156
Income taxes (3,451) (2,240) (7,520) (6,835)
--------- --------- --------- ---------
Income from continuing operations 5,566 3,944 11,817 11,321
Discontinued Operations - 2,348 - 3,458
--------- --------- --------- ---------
Net Income $ 5,566 $ 6,292 $ 11,817 $ 14,779
========= ========= ========= =========
Earnings Per Common Share
Income from continuing operations $ .56 $ .40 $ 1.18 $ 1.14
========= ========= ========= =========
Net income $ .56 $ .63 $ 1.18 $ 1.49
========= ========= ========= =========
Average number of shares outstanding 10,005 9,930 9,997 9,928
========= ========= ========= =========
Diluted Earnings per Common Shares
Income from continuing operations $ .55 $ .39 $ 1.17 $ 1.13
========= ========= ========= =========
Net income $. .55 $ .63 $ 1.17 $ 1.48
========= ========= ========= =========
Average number of shares outstanding 10,057 9,988 10,065 9,989
========= ========= ========= =========
Cash Dividends Paid Per Share $ .53 $ .52 $ 1.06 $ 1.04
========= ========= ========= =========
</TABLE>
See accompanying notes to unaudited financial statements.
Page 4 of 17<PAGE>
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
---------------------
1998 1997*
--------- ---------
<S> <C> <C>
Cash Flows From Operating Activities
Net income $ 11,817 $ 14,779
Adjustments to reconcile net income to net cash
provided by operating activities:
Gains on sale of investments (10,014) (12,235)
Depreciation and amortization 8,581 7,048
Provision for deferred income taxes 1,403 (134)
Discontinued operations - (3,458)
Changes in operating assets and liabilities,
excluding amounts acquired in business combinations
Increase in accounts receivable (1,265) (2,712)
Increase in inventories and other current assets (1,751) (17)
(Increase)/decrease in statutory deposits (282) 2,982
Decrease in accounts payable, deferred contract
revenue and other current liabilities (2,995) (2,828)
Increase in income taxes 1,312 1,486
Other - net (1,566) (631)
--------- ---------
Net cash provided by continuing operations 5,240 4,280
Net cash provided by discontinued operations - 5,431
--------- ---------
Net cash provided by operating activities 5,240 9,711
--------- ---------
Cash Flows From Investing Activities
Proceeds from sale of investments 11,259 14,060
Capital expenditures (9,789) (9,819)
Business combinations, net of cash acquired (8,418) (10,273)
Net cash outflow from the dispositions of discontinued operations (4,465) (1,317)
Purchase of investments (642) -
Investing activities of discontinued operations - (4,332)
Other-net 1,348 (21)
--------- ---------
Net cash used by investing activities (10,707) (11,702)
--------- ---------
Cash Flows From Financing Activities
Dividends paid (10,712) (10,436)
Retirement of long-term debt (870) (23,103)
Proceeds from issuance of long-term debt - 35,000
Other - net 118 830
--------- ---------
Net cash provided/(used) by financing activities (11,464) 2,291
--------- ---------
Increase/(Decrease) In Cash And Cash Equivalents (16,931) 300
Cash and cash equivalents at beginning of period 70,958 14,028
--------- ---------
Cash and cash equivalents at end of period $ 54,027 $ 14,328
========= =========
</TABLE>
* Reclassified for operations discontinued in September 1997.
See accompanying notes to unaudited financial statements.
Page 5 of 17<PAGE>
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
Notes to Unaudited Financial Statements
1. The accompanying unaudited consolidated financial statements
have been prepared in accordance with Rule 10-01 of SEC
Regulation S-X. Consequently, they do not include all the
disclosures required under generally accepted accounting
principles for complete financial statements. However, in
the opinion of the management of Chemed Corporation (the
"Company"), the financial statements presented herein contain
all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the financial
position, results of operations and cash flows of the Company
and its consolidated subsidiaries ("Chemed"). For further
information regarding Chemed's accounting policies, refer to
the consolidated financial statements and notes included in
Chemed's Annual Report on Form 10-K for the year ended
December 31, 1997.
2. Earnings per common share are computed using the weighted
average number of shares of capital stock outstanding.
Diluted earnings per common share reflect the dilutive impact
of outstanding stock options and nonvested stock awards.
3. The Company had total comprehensive income of $2,122,000,
$8,940,000, $8,471,000 and $7,045,000 for the three months
ended June 30, 1998 and 1997 and for the six months ended
June 30, 1998 and 1997, respectively. The difference between
the Company's net income and comprehensive income relates to
the cumulative unrealized appreciation/depreciation on its
available-for-sale securities.
Page 6 of 17<PAGE>
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Financial Condition
- -------------------
The decline in cash and cash equivalents from $71.0 million at
December 31, 1997 to $54.0 million at June 30, 1998 is primarily due
to the use of cash for business combinations and for the payments of
costs relative to discontinued operations (largely a post-closing
balance sheet valuation adjustment related to operations
discontinued in September 1997). The decline in other assets from
$21.5 million at December 31, 1997 to $16.9 million at June 30, 1998
is primarily due to the reclassification of certain assets of rabbi
trusts used to fund non-qualified benefit plans. In accordance with
a recent consensus by the Emerging Issues Task Force of the
Financial Accounting Standards Board, shares of Chemed stock held by
the trusts are included in treasury stock at June 30, 1998.
The decline in other current liabilities from $42.3 million at
December 31, 1997 to $36.0 million at June 30, 1998 is primarily due
to the payment of liabilities relative to operations discontinued in
prior years.
Vitas Healthcare Corporation ("Vitas"), the privately held
provider of hospice services to the terminally ill in which the
Company carries an investment of $27 million of redeemable preferred
stock, made preferred dividend payments of $499,500 and $2,116,800,
on June 19 and July 15, 1998, respectively. As a result, the
preferred dividends in arrears have been reduced from $2.4 million
at March 31, 1998 to $1.0 million at July 31, 1998. Vitas is
continuing to explore long-term financing alternatives to increase
its liquidity. In connection therewith, the Company extended the
maturity date on its holdings of preferred stock from the fourth
quarter of 1998 to April 1, 1999. On the basis of current
information, management believes the company's investment in Vitas
is fully recoverable and that no impairment exists.
At June 30, 1998 Chemed had approximately $106.2 million of
unused lines of credit with various banks. Management believes its
liquidity and sources of capital are satisfactory for the Company's
needs in the foreseeable future.
Page 7 of 17<PAGE>
Results of Operations
- ---------------------
Sales and service revenues and operating profit from
continuing operations by business segment follow (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
1998 1997 1998 1997
------- -------- --------- -------
Sales and Service
Revenues
- -----------------
Roto-Rooter $ 47,060 $ 36,301 $ 88,739 $ 72,180
Patient Care 29,980 32,714 59,780 58,647
Service America 17,903 17,004 34,836 32,849
-------- ------- --------- --------
Total $ 94,943 $ 86,019 $ 183,355 $ 163,676
======== ======== ========= ========
Operating Profit
- ----------------
Roto-Rooter $ 4,608 $ 3,750 $ 8,501 $ 7,235
Patient Care 1,582 1,463 2,727 2,438
Service America 917 836 1,717 1,579
-------- -------- --------- ---------
Total $ 7,107 $ 6,049 $ 12,945 $ 11,252
======== ======== ========= =========
Data relating to (a) the increase in service revenues and sales and
(b) operating profit as a percent of sales and service revenues are
set forth below:
Operating
Service Revenues Profit as a
and Sales % % of Sales
Increase/(Decrease) (Operating Margin)
------------------ ------------------
1998 vs. 1997 1998 1997
------------------ ------------------
Three Months Ended June 30,
- ---------------------------
Roto-Rooter 30 % 9.8% 10.3%
Patient Care (8) 5.3 4.5
Service America 5 5.1 4.9
Total 10 7.5 7.0
Six Months Ended June 30,
- ---------------------------
Roto-Rooter 23 % 9.6% 10.0%
Patient Care 2 4.6 4.2
Service America 6 4.9 4.8
Total 12 7.1 6.9
Page 8 of 17<PAGE>
Second Quarter 1998 versus Second Quarter 1997
- ----------------------------------------------
Service revenues and sales of the Roto-Rooter segment for
the second quarter of 1998 totalled $47,060,000, an increase of 30%
over the $36,301,000 recorded in the second quarter of 1997.
Revenues of the plumbing services business and the drain cleaning
business increased 40% and 12%, respectively, for the second quarter
of 1998, as compared with the revenues recorded in the second
quarter of 1997. These revenues accounted for 42% and 38%,
respectively of Roto-Rooter's total revenues and sales during the
1998 period. Excluding businesses acquired in 1997 and 1998,
revenues for the second quarter of 1998 increased 13% over such
revenues recorded in the 1997 period. The operating margin of the
Roto-Rooter segment during the second quarter of 1998 was 9.8% as
compared with 10.3% during the second quarter of 1997. This decline
was attributable to a lower gross profit margin in the 1998 second
quarter. The lower margin was attributable to a change in sales mix
in the 1998 period as revenues of the plumbing repair business and
heating, ventilating and air conditioning ("HVAC") business
increased at greater rates than the sewer and drain cleaning
business which carries a higher margin than plumbing and HVAC.
Service revenues of the Patient Care segment declined 8%
from $32,714,000 in the second quarter of 1997 to $29,980,000 in the
second quarter of 1998. This decline was primarily due to a decline
in Medicare revenues resulting from the passage of the Balanced
Budget Act of 1997. The operating margin of this segment increased
from 4.5% during the second quarter of 1997 to 5.3% during the
second quarter of 1998 due primarily to lower branch operating
expenses as a percent of revenues.
Service revenues and sales of the Service America segment
increased 5% from $17,004,000 to $17,903,000 in the second quarter
of 1998. This revenue increase was largely attributable to a 12%
increase in revenues of Service America's retail business which
accounts for approximately 22% of its overall sales. The operating
margin of the Service America segment was 4.9% in the 1997 quarter
and 5.1% in the 1998 period.
Income from operations increased from $4,617,000 in the
second quarter of 1997 to $5,246,000 in the second quarter of 1998,
primarily as a result of higher operating profit of the Company's
three segments.
Interest expense declined from $2,915,000 in the second
quarter of 1997 to $1,841,000 in the second quarter of 1998,
primarily due to the reduction in the Company's long-term debt which
occurred in September of 1997.
Page 9 of 17<PAGE>
Other income-net increased from $4,482,000 in the second
quarter of 1997 to $5,612,000 in the second quarter of 1998
primarily due to larger gains on the sales of investments and
increased interest income in the 1998 period. The increase in
interest income was primarily due to larger cash balances during
1998.
The Company's effective income tax rate during the second
quarter of 1998 was 38.3% as compared with 36.2% during the second
quarter of 1997. This increase was largely attributable to the
decline (as a percent of income before taxes) in the tax benefit on
dividends paid to the Company's ESOP during 1998.
Income from continuing operations during the second
quarter of 1998 totalled $5,566,000 ($.56 per share) as compared
with $3,944,000 ($.40 per share) in the second quarter of 1997.
This increase was attributable to larger gains on the sales of
investments, lower interest expense and higher interest income
during the 1998 period. Excluding gains from the sales of
investments in both periods, income from continuing operations for
the second quarter of 1998 totalled $.31 per share as compared with
$.19 per share during the second quarter of 1997.
Net income declined from $6,292,000 ($.63 per share) in
the 1997 second quarter to $5,566,000 ($.56 per share) in the 1998
second quarter, as a result of income from discontinued operations
of $2,348,000 in 1998, primarily relating to operations disposed of
in September 1997.
Six Months Ended June 30, 1998 Versus June 30, 1997
- ---------------------------------------------------
Service revenues and sales of the Roto-Rooter segment for
the first six months of 1998 totalled $88,739,000, an increase of
23% over the $72,180,000 recorded in the first six months of 1997.
Revenues of the plumbing services business and drain cleaning
business increased 31% and 11%, respectively, for the first six
months of 1998. Excluding revenues of businesses acquired in 1998
and 1997, revenues of the segment increased 11% during the first six
months of 1998. The operating margin of the Roto-Rooter segment in
the first six months of 1998 was 9.6% as compared with 10.0% during
the first six months of 1997. This decline was attributable to a
lower gross profit margin in the 1998 period primarily resulting
from a change in sales mix.
Page 10 of 17<PAGE>
Revenues of the Patient Care segment increased 2% from
$58,647,000 in the first six months of 1997 to $59,780,00 in the
first six months of 1998. Excluding the revenues of businesses
acquired in 1997 and 1998, revenues for the 1998 period declined 4%
in 1998 primarily from a decline in Medicare revenues resulting from
the passage of the Balanced Budget Act of 1997. The operating
margin of this segment was 4.2% in the first six months of 1997,
increasing to 4.6% during the first six months of 1998. This
increase was primarily attributable to lower branch operating
expenses as a percent of revenues in the 1998 period.
Service revenues and sales of the Service America segment
increased 6% from $32,849,000 in the first six months of 1997 to
$34,839,000 in the first six months of 1998. This revenues increase
was driven by a 18% increase in the sales of Service America's
retail business, during the 1998 period. The operating margin of
the Service America segment was 4.9% during the first six months of
1998 as compared with 4.8% during the first six months of 1997.
Income from operations increased from $8,834,000 during
the first six months of 1997 to $8,991,000 during the comparable
period of 1998. This increase was primarily a result of higher
operating profit recorded by all three of the Company's segments
during 1998, partially offset by operating costs of the Company's
developing software consulting operations and favorable accrual
adjustments to overhead expenses during the first quarter of 1997.
Interest expense declined from $5,552,000 during the first
six months of 1997 to $3,599,000 during the first six months of
1998, largely as a result of the reduction of the Company's long-
term debt which occurred during September of 1997.
Other income-net declined from $14,874,000 during the
first six months of 1998 to $13,945,000 during the first six month
of 1997, as a result of lower investment gains recorded in 1998,
partially offset by increased interest income during the 1998
period.
The Company's effective tax rate during the first six
months of 1998 was 38.9% as compared with 37.6% during the first six
months of 1997. This increase was largely due to a reduction (as a
percent of income before taxes) in the tax benefit on dividends paid
to the Company's ESOP during the 1998 period.
Income from continuing operations during the first six
months of 1998 totalled $11,817,000 ($1.18 per share) as compared
with $11,321,000 ($1.14 per share) for the first six months of 1997.
Page 11 of 17<PAGE>
This increase was primarily attributed to lower interest expense and
higher interest income during the 1998 period partially offset by
larger realized capital gains on the sales of investments during the
1997 period. Excluding gains on the sales of investments in both
periods, income from continuing operations for the first six months
of 1998 totalled $.55 per share as compared with $.37 per share
during the first six months of 1997.
Net income declined from $14,779,000 ($1.49 per share) in
the first six months of 1997 to $11,817,000 ($1.18 per share) in the
1998 first six moths, largely as a result of income from
discontinued operations recorded in the first six months of 1997,
primarily relating to operations which were disposed of in September
1997.
Page 12 of 17<PAGE>
PART II -- OTHER INFORMATION
----------------------------
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) Chemed held its Annual Meeting of Shareholders on May 18, 1998.
(b) The names of each director elected at this Annual Meeting
are as follows:
Edward L. Hutton Sandra E. Laney
James H. Devlin Kevin J. McNamara
Charles H. Erhart, Jr. John M. Mount
Joel F. Gemunder Timothy S. O'Toole
Lawrence J. Gillis D. Walter Robbins, Jr.
Patrick P. Grace Donald E. Saunders
Thomas C. Hutton Paul C. Voet
Walter L. Krebs George J. Walsh, III
(c) The stockholders then ratified the Board of Directors'
selection of PricewaterhouseCoopers LLP as independent
accountants for the Company and its consolidated
subsidiaries for the year 1998: 8,796,864 votes were cast
in favor of the proposal, 54,462 votes were cast against
it, 65,969 votes abstained, and three were broker non-
votes.
With respect to the election of directors, the number of votes
cast for each nominee was as follows:
Votes Votes
Votes For Against Withheld
--------- ------- --------
E.L. Hutton 8,732,754 29,217 155,324
J.H. Devlin 8,759,233 2,738 155,324
C.H. Erhart, Jr. 8,729,584 32,387 155,324
J.F. Gemunder 8,759,683 2,288 155,324
L.J. Gillis 8,761,305 666 155,324
P.P. Grace 8,720,336 41,635 155,324
T.C. Hutton 8,754,153 7,818 155,324
W.C. Krebs 8,753,783 8,818 155,324
S.E. Laney 8,757,745 4,226 155,324
K.J. McNamara 8,759,890 2,081 155,324
J.M. Mount 8,760,149 1,822 155,324
T.S. O'Toole 8,761,971 0 155,324
D.W. Robbins, Jr. 8,733,148 28,823 155,324
D.E. Saunders 8,751,491 10,480 155,324
P.C. Voet 8,757,029 4,942 155,324
G.J. Walsh III 8,759,934 2,037 155,324
Page 13 of 17<PAGE>
Item 5. Other Information
-----------------
The Securities and Exchange commission has recently amended
Rule 14a-4. For shareholder proposals to be presented at annual
shareholders' meetings other than pursuant to Rule 14a-8 (i.e.,
which are not to be included in the registrant's proxy
statement), management may exercise discretionary voting
authority under proxies solicited by it for the meetings if it
receives notice of such proposals less than 45 days prior to the
calendar date proxy materials were mailed for the prior year's
annual meeting.
As this new provision applies to the Company, if notice of a
non-Rule 14a-8 shareholder proposal to be presented at the
Company's 1999 Annual Meeting of Shareholders is received by the
Company after February 14, 1999, the Company may exercise
discretionary voting authority under proxies solicited by it.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
--------
Exhibit SK 601
No. Ref. No. Description
------- -------- ------------------
1 (11) Statement re:
Computation of Per
Share Earnings
2 (27) Financial Data
Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Chemed Corporation
-------------------------
(Registrant)
Dated: August 12, 1998 By Naomi C. Dallob
---------------------- -------------------------
Naomi C. Dallob
Vice President and Secretary
Page 14 of 17<PAGE>
Dated: August 12, 1998 By Arthur V. Tucker, Jr.
---------------------- -------------------------
Arthur V. Tucker, Jr.
Vice President and
Controller (Principal
Accounting Officer)
Page 15 of 17
EXHIBIT 11
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
COMPUTATION OF PER SHARE EARNINGS
(in thousands except per share data)
<TABLE>
<CAPTION>
Income from Continuing Operations
--------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1998 1997 1998 1997
-------- -------- ----------------
Computation of Earnings Per
Common Share
- ---------------------------
<S> <C> <C> <C> <C>
Reported Income $ 5,566 $ 3,944 $ 11,817 $ 11,321
======== ======== ======== ========
Average number of shares
outstanding 10,005 9,930 9,997 9,928
======== ======== ======== ========
Earnings per common share $ 0.56 $ 0.40 $ 1.18 $ 1.14
======== ======== ======== ========
Computation of Diluted
Earnings Per Common Share
- ---------------------------
Reported Income $ 5,566 $ 3,944 $ 11,817 $ 11,321
======== ======== ======== ========
Average number of shares
outstanding 10,005 9,930 9,997 9,928
Effect of nonvested
stock awards 36 26 40 25
Effect of unexercised
stock options 16 32 28 36
-------- -------- -------- --------
Average number of shares
used to compute diluted
earnings per share 10,057 9,988 10,065 9,989
======== ======== ======== ========
Diluted earnings per
common share $ 0.55 $ 0.39 $ 1.17 $ 1.13
======== ======== ======== ========
</TABLE>
E - 1
Page 16 of 17<PAGE>
EXHIBIT 11
(continued)
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
COMPUTATION OF PER SHARE EARNINGS
(in thousands except per share data)
<TABLE>
<CAPTION>
Net Income
-------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -------------------
1998 1997 1998 1997
-------- -------- -------- --------
Computation of Earnings Per
Common Share
- ---------------------------
<S> <C> <C> <C> <C>
Reported Income $ 5,566 $ 6,292 $ 11,817 $ 14,779
======== ======== ======== ========
Average number of shares
outstanding 10,005 9,930 9,997 9,928
======== ======== ======== ========
Earnings per common share $ 0.56 $ 0.63 $ 1.18 $ 1.49
======== ======== ======== ========
Computation of Diluted
Earnings Per Common Share
- ---------------------------
Reported Income $ 5,566 $ 6,292 $ 11,817 $ 14,779
Impact of subsidiary options - (5) - (5)
-------- -------- -------- --------
Adjusted Income $ 5,566 $ 6,287 $ 11,817 $ 14,774
======== ======== ======== ========
Average number of shares
outstanding 10,005 9,930 9,997 9,928
Effect of nonvested
stock awards 36 26 40 25
Effect of unexercised
stock options 16 32 28 36
-------- -------- -------- --------
Average number of shares
used to compute diluted
earnings per share 10,057 9,988 10,065 9,989
======== ======== ======== ========
Diluted earnings per
common share $ 0.55 $ 0.63 $ 1.17 $ 1.48
======== ======== ======== ========
</TABLE>
E - 2
Page 17 of 17<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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<NAME> CHEMED CORPORATION
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